China’s e-commerce giant company JD.com has joined one of the leading Chinese drug manufacturing companies, Shanghai Pharmaceuticals Holding Co. Ltd. in a deal that is set to develop online healthcare business, according to a recent report. This turn of events clearly indicates the growing competition between leading e-commerce companies trying to get a slice of the burgeoning online healthcare market pie in China.

Earlier last week, Alibaba Group Holding Ltd. the larger market contender and U.S. drug company Merck & Co. had combined forces to pursue business opportunities for development of health data analysis and warehousing logistics related to healthcare.

China has a rapidly expanding online healthcare market which is expected to cure the limitations of serpentine hospital queues, expensive healthcare costs, and the repeated charges of corruption. At present sale of prescription medicines are banned but the online market is expected to open up with a list being finalized for approval, according to industry sources.

Shanghai Pharma has stated in a filing to the Hong Kong stock exchange that the government plans to announce new policies to boost online pharmacy opportunity. JD.com has declined to comment on this development.

China is considered as the world’s second leading pharmaceutical market and has huge market potential for medical device making companies, drug manufacturing companies, and hospital operators. The country can prove to be an attraction for such companies to invest judging by the estimated figures by 2018 by IMS Health, of spending set at approximately $185 billion (118 billion pounds).

China’s online drug market is at early stages so needs to proceed cautiously as regulations and policies need to be dealt with care. These policies and regulations are still not defined according to Shanghai Pharma.